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The following information applies to the questions displayed below. Rita owns a sole proprietorship in which she works as a management consultant. She maintains an
The following information applies to the questions displayed below. Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,800. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes Interest on home mortgage Operating expenses of home Depreciation $1,700 5,250 850 1,660 Also, assume that, not counting the sole proprietorship, Rita's AGl is $62,000. Assume Rita's consulting business generated $15,500 in gross income. (Leave no answer blank. Enter zero if applicable.) b. What would Rita's home office deduction be if her business generated $10,500 of gross income instead of $15,500? (Answer for both the actual expense method and the simplified method.) Actual expense method Simplified method
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